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Breakfast Cereals - UK - September 2015

OVERVIEW
What you need to know
Covered in this report
EXECUTIVE SUMMARY
The market
Figure 1: UK retail value sales of the total breakfast cereals market, 2010-20
Sugar debates affects the market
A desire for variety is changing the breakfast occasion
Companies, brands and innovation
Kellogg’s dominates RTE cereals
Quaker sees value growth in hot cereals
Brands look to distinguish themselves through their image
Cereals look to strengthen high-protein proposition
The consumer
More than eight in 10 adults eat cereals
Figure 2: Usage of breakfast cereals, June 2015
Porridge that helps gut health/digestion top of product enticements
Figure 3: Interest in select breakfast cereal concepts, June 2015
Fortification offers consumers a way to get nutrients into their diet
Figure 4: Attitudes towards cold breakfast cereals, June 2015
High sugar content of flavoured cereal is a likely barrier to entry
Figure 5: Perceptions of select breakfast foods, June 2015
ISSUES AND INSIGHTS
Catering to the more adventurous breakfast eater should help to stem the decline in sales
The facts
The implications
Interest in fortification and tummy health provides an incentive to NPD and communication around these issues
The facts
The implications
A greater adoption of alternatives such as stevia could alleviate concerns on sugar
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Sales slip in the cereals market
Cereals are expected to see value growth over 2015-20, though a drop in volumes
Sugar attracts negative attention
Increased incomes should help to support sales
A desire for variety is changing the breakfast occasion
MARKET SIZE AND FORECAST AND SEGMENT PERFORMANCE
Sales slip in the cereals market
Figure 6: UK retail value and volume sales of the total breakfast cereals market, 2010-20
Figure 7: UK retail value sales of the total breakfast cereals market, 2010-20
RTE cereals to see drop in value and volume sales in 2015
Figure 8: UK retail value and volume sales of the RTE breakfast cereals market, 2010-20
Figure 9: UK retail value sales of the RTE breakfast cereals market, 2010-20
Value and volume sales stall for hot cereals
Figure 10: UK retail value and volume sales of the hot breakfast cereals market, 2010-20
Figure 11: UK retail value sales of the hot breakfast cereals market, 2010-20
MARKET DRIVERS
Sugar debate continues to impact the market
A desire for variety is changing the breakfast occasion
Out of home poses a challenge
Increased incomes should help to support sales
The rise in children should provide a boost
KEY PLAYERS – WHAT YOU NEED TO KNOW
Kellogg’s loses sales and reduces adspend
Quaker bucks downward trend to see growth
Cereals look to strengthen high-protein proposition
Brands look to distinguish themselves through their image
BRAND RESEARCH
What you need to know
Brand map
Figure 12: Attitudes towards and usage of selected brands, June 2015
Key brand metrics
Figure 13: Key metrics for selected brands, June 2015
Brand attitudes: Dorset Cereals promotes a more premium brand image
Figure 14: Attitudes, by brand, June 2015
Brand personality: Shredded Wheat’s healthy angle limits upbeat connotations
Figure 15: Brand personality – Macro image, June 2015
Frosties may find usage limited by association with being unhealthy
Figure 16: Brand personality – Micro image, June 2015
Brand analysis
Quaker Oat So Simple cements strong brand image with high recommendation
Figure 17: User profile of Quaker Oat so Simple, June 2015
Dorset Cereals encourages different perceptions to all other brands
Figure 18: User profile of Dorset Cereals, June 2015
Crunchy Nut leads on perceptions of taste
Figure 19: User profile of Crunchy Nut, June 2015
Special K maintains strong brand image among women
Figure 20: User profile of Special K, June 2015
Alpen could face increasing challenge from Dorset Cereals
Figure 21: User profile of Alpen, June 2015
Shredded Wheat has a more favourable image among older consumers
Figure 22: User profile of Shredded Wheat, June 2015
Cheerios’ family image may limit breadth of appeal
Figure 23: User profile of Cheerios, June 2015
Frosties scores highly on taste, but perceptions of unhealthiness may affect recommendation
Figure 24: User profile of Frosties, June 2015
MARKET SHARE
Kellogg’s continues to dominate RTE cereals, despite falling sales
Weetabix and Nestlé outperform Kellogg’s
Dorset Cereals and Mornnflake buck the category trend to see value growth
Figure 25: UK retail sales of leading brands in the RTE breakfast cereals market, by value, 2013/14 and 2014/15
Figure 26: UK retail sales of leading brands in the RTE breakfast cereals market, by volume, 2013/14 and 2014/15
Figure 27: UK retail sales of leading manufacturers in the RTE breakfast cereals market, by value and volume, 2013/14 and 2014/15
Quaker dominates hot cereals through its Oats So Simple brand
Weetabix sees a steep decline in value and volume sales
Kellogg’s looks to cereal-branded porridge to boost sales
Figure 28: UK retail sales of leading brands in the hot breakfast cereals market, by value and volume, 2013/14 and 2014/15
Figure 29: UK retail sales of leading manufacturers in the hot breakfast cereals market, by value and volume, 2013/14 and 2014/15
LAUNCH ACTIVITY AND INNOVATION
RTE cereals manufacturers have stepped up NPD following a recent slide
Figure 30: Share of new product development in the UK cereals market, by sub-category, 2012-15*
Low/no/reduced sugar claims remain niche
Figure 31: Share of new product development in the UK cereals market, by the low/no/reduced sugar claim, 2012-15*
Cereal brands look to tap into the gluten-free trend
Figure 32: Share of new product development in the UK cereals market, by the gluten-free claim, 2012-15*
Calling out protein content to appeal to health-conscious consumers
Brands extend their brands into new areas
Brands launch dry bircher muesli products
One cup formats should appeal to the time-pressed
BRAND COMMUNICATION AND PROMOTION
Adspend falls as Kellogg’s continues to cut back
Nestlé increases investment in Shredded Wheat in 2015
Quaker invests in TV support
Weetabix focuses on nutrition
Dorset Cereals promotes energy message
Figure 33: Recorded above-the-line, online display and direct mail total advertising expenditure on breakfast cereals, by top 10 advertisers (sorted by 2014), 2011-15*
Inability to advertise to children affects market
Figure 34: Recorded above-the-line, online display and direct mail total advertising expenditure on breakfast cereals, by media type (sorted by 2014), 2011-15*
Brands look to experiential campaigns
THE CONSUMER – WHAT YOU NEED TO KNOW
Usage stands at more than 80%
Opportunity to market tummy health for porridge
Sugar attracts negative attention
Fortification appeals to consumers looking for a fast track to nutrition
Customisation provides scope for NPD
A desire for variety poses a challenge to the market
BREAKFAST CEREALS USAGE
More than eight in ten adults eat cereals
Figure 35: Usage of breakfast cereals, June 2015
Parents over-index across all types
Figure 36: Usage of breakfast cereals, by parent of under-16s, June 2015
Sizeable minority eat cereals every day
Figure 37: Frequency of eating breakfast cereals, June 2015
Almost half eat breakfast biscuits
Figure 38: Frequency of eating breakfast biscuits, June 2015
BREAKFAST CEREAL ENTICEMENTS
Porridge that helps gut health/digestion is top of product enticements
Figure 39: Interest in select breakfast cereal concepts, June 2015
Single serve packaging appeals to a sizeable minority
Online poses an opportunity
Interest in different grains
BEHAVIOUR TOWARDS BREAKFAST CEREALS
Switching between breakfast foods threatens the cereals market
Figure 40: Statements on breakfast cereals, June 2015
Customisation is still important
Switching to breakfast biscuits poses a concern
ATTITUDES TOWARDS COLD BREAKFAST CEREALS
Fortification offers consumers a way to get nutrients into their diet
Figure 41: Attitudes towards cold breakfast cereals, June 2015
Openness to cereals as a meal beyond breakfast
Almost one in four does not consider health
PERCEPTIONS OF BREAKFAST FOODS
High sugar content of flavoured cereal is a likely barrier to entry
Flavoured cereals are seen to be unhealthy by almost two thirds
Figure 42: Perceptions of select breakfast foods, June 2015
Fibre and protein content should be positives for breakfast cereals
Cereals/porridge lose out to eggs on protein claims
Around half of adults describe cereal and porridge as tasty
APPENDIX – MARKET SIZE AND FORECAST AND SEGMENT PERFORMANCE
Figure 43: Best- and worst-case forecasts for the total UK breakfast cereals market, by value, 2015-20
Figure 44: Best- and worst-case forecasts for the total UK breakfast cereals market, by volume, 2015-20
Figure 45: UK retail volume sales of the total breakfast cereals market, 2010-20
Figure 46: Best- and worst-case forecasts for the RTE breakfast cereals market, by value, 2015-20
Figure 47: Best- and worst-case forecasts for the RTE breakfast cereals market, by volume, 2015-20
Figure 48: UK retail volume sales of the RTE breakfast cereals market, 2010-20
Figure 49: Best- and worst-case forecasts for the hot breakfast cereals market, by value, 2015-20
Figure 50: Best- and worst-case forecasts for the hot breakfast cereals market, by volume, 2015-20
Figure 51: UK retail volume sales of the hot breakfast cereals market, 2010-20

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